Archive for the ‘Coupons’ Category

YPG Debuts iPad App

June 15, 2010

Canada’s Yellow Pages Group becomes the second major YP publisher (after Yellowbook) to launch an app for the iPad. It also promotes other YPG properties, such as its Urbanizer iPhone app, Restaurantica and its deals site, RedFlagDeals.com. However the buttons below take users to the Internet versions of those sites rather than specially iPad/mobile optimized versions.

Overall my sense is that the app is a good start but can be tweaked improved, especially at the profile page level.

A couple of thoughts:

Three years ago I wrote about the “PC in the kitchen” that would replace the phone book. This is it — it’s where my iPad sits much of the time.

One of the simple YPG iPad app features that I like, which is relatively common across directory sites, is favorites and recent searches. This becomes an informal list of contacts — you can also add SMBs or locations to the formal iPad contacts — for quick reference. So in the kitchen this is like a phone book in a way. The potential for engagement around this simple idea is quite high.

The next step is for the iPad to become a phone, which it is with the Skype app, and integrate calling into an app like this. So when I tap the number above, Skype launches and I can call the business. YPG could track that call and get credit for delivering it. You get the idea.

The YPG iPad app is also a potentially great “deals” platform. Coupons/deals should be integrated into this app as well. One could imagine a Groupon-like local deal of the day . . .

Sugar Buys BookFresh and FreshGuide

June 9, 2010

Female-centric content and ad network Sugar, Inc. yesterday announced the acquisition of BookFresh and FreshGuide (also part of BookFresh):

In its first foray into providing local editorial and advertising, Sugar Inc. (SugarInc.com) today announced it has signed a definitive agreement to acquire FreshGuide Inc., which operates FreshGuide.com and BookFresh (BookFresh.com). FreshGuide.com is an online women-focused city guide that provides access to exclusive daily offers from a well-edited selection of local businesses in beauty, health and fitness, dining, travel getaways and other relevant categories. BookFresh provides an online booking service for local businesses, such as spas and salons.

BookFresh began as HourTown and is an online booking platform for SMBs. I wrote about it and the segment previously:

FreshGuide was a second effort by BookFresh CEO Ryan Donahue and team and is a group-buying site, although Donahue describes FreshGuide as a cityguide (more fodder for TheDealMap and Yipit):

Donahue will now run local for Sugar. He said the following to me in an email exchange:

[I will be] GM of FreshGuide and run Sugar’s local business. I am excited to create a female-focused local advertising platform that will leverage the offers capabilities of freshguide and the online bookings capabilities of BookFresh. I think local advertisers with an interest in wooing women, will find that we offer a compelling combination of merchant tools and a hyper-targeted female audience.

Deal terms were not disclosed.

Angie’s List: Let’s Make a Deal

June 1, 2010

Angie’s List has jumped on the deals/coupons bandwagon, according to a press missive I just received.

Called “The Big Deal,” it’s a version of group buying but it also includes a membership incentive: the deals are less expensive for Angie’s List members.

According to the release:

The Big Deal has been offered on a test basis in Indianapolis, Chicago and Washington D.C. for the past month.  Those offers – two of which are active until 5 p.m. today – include:

  • 50 percent off a facial from a Chicago salon – Details at http://bit.ly/cIv2MU
  • 55 percent off carpet cleaning in Indianapolis – Details at http://bit.ly/ctfnNg
  • 65 percent off from a Chicago painter
  • 58 percent off a massage in Washington D.C.
  • 80 percent off a dental exam from an Indianapolis dentist

Apparently these deals are only being offered in connection with businesses that have high service ratings on Angie’s List as well.

Deal Demographics: Wealthy Use Coupons

May 25, 2010

Seeking to dispel the notion of coupon users as lower income and/or education, Coupons.com and Harris Interactive released some interesting data yesterday on the demographics of coupon usage.

The data are drawn from a consumer survey (n=1,017) conducted in March. Here are the top-level findings:

Income:

  • 61% of respondents with a household income of $100,000 or more have redeemed a coupon in the past six months.
  • 39% in this income bracket have redeemed coupons printed from an online source in the past six months, making them nearly twice as likely to do so as adults with a household income less than $35,000 (21%).
Education:
  • Adults with college degrees are almost twice as likely to have used coupons in the past six months as those who didn’t graduate from high school
  • 77% who have used coupons in the past six months live in metro areas.
Gender:
  • 51% of males have used a coupon in the past six months.
  • 36% of males responded that they even have a designated place to keep their coupons, and they’re just as likely as women to clip and tell: 18% of men have blabbed to a friend about a coupon they found online.
The survey also found that “even if economic conditions improve, eight out of 10 U.S. adults plan to continue to engage in couponing activities, according to the survey findings.”

These data are consistent with many other studies that show the popularity of digital (online, mobile) deals and coupons. The “stigma” associated with paper coupons largely goes away online and in mobile.

RelatedMMA: 21% Now Using ‘M-Commerce’:
Consumers are most interested in using their mobile phones to use discounts or coupons (30%) and to purchase content for their mobile phones (26%). Asians and young adults, ages 25-34 years, stood out as those most interested to use discounts or coupons (38% and 35% respectively were “very interested” or “somewhat interested”).

Yahoo! Continues Outsourcing with Match

May 24, 2010

Yahoo! has outsourced another vertical — dating (which is largely local) to IAC’s Match.com:

Match.com, an operating business of IAC (Nasdaq: IACI), today announced an agreement by which Match.com will become the exclusive online dating site on Yahoo!.  Yahoo! Personals users will have the opportunity to move to a new co-branded Match.com experience, “Match.com on Yahoo!” where they will combine with the greater Match.com community. The Match.com on Yahoo! service is available starting today.

Yahoo! Personals users will receive special offers designed to help them enjoy all that Match.com has to offer. The two companies are working together to help users easily migrate to Match.com on Yahoo!. Over the next two months, existing Yahoo! Personals members will be given the opportunity to seamlessly migrate their Yahoo! Personals accounts over to the new experience. Match.com on Yahoo! offers compelling features including mobile access, daily personalized matches and robust search tools and will fully replace the existing Yahoo! Personals experience at the end of the transition period.

This is now part of a pattern that includes search, shopping and other verticals. In a way its smart: pick the best-of-breed partner and then let them worry about product development. It’s part of an overall cost-containment strategy. Yahoo! gets the content without the engineering costs.

The company has decided there are a number of strategic areas that it needs to keep in house: news, sports, finance, among a few others. I believe that Local is also on that list.

___

Related: Yahoo! announced a relationship with coupon/direct marketing vendor Valassis last week:

Yahoo! is entering into a partnership with leading media and marketing services company Valassis. The partnership will expand the online advertising options available to Valassis’ clients, providing them with Yahoo!’s customized targeting solutions for reaching the right customers in their communities. Valassis’ clients will further benefit from the ability to access premium online display advertising inventory from Yahoo!

The partnership is a key component of Yahoo!’s greater strategy of working with local partners to help them reinvent their business and provide them with the tools they need to maximize their online spend.

The DealMap: ‘CityGrid for Local Deals’

May 11, 2010

The friendly folks behind unassuming local-semantic search site Center’d have just launched what is probably the definitive local deal site on the Internet, The Dealmap. I wrote about it in a preliminary way in March after a brief discussion with Center’d CEO Jennifer Dulski.

Now there’s more detail out and the site has gone live.

Here are some quick facts gleaned from the press release:

  • The DealMap is available in the US and UK (the heatmap above indicates coverage areas)
  • There are daily deal emails and deal alerts via Twitter in more than 20 cities (all the individual group buying sites are here, and Foursquare)
  • Deals are coming from a wide range of sources: partner feeds, other coupon/deal sites, traditional media sites, directly from businesses and from users (there are game dynamics to promote the last of these)
  • Dealmap will also launch an iPhone application (Android and RIM too)

There’s also an API, which means that other publishers and developers can access all this content as well. This is, essentially, CityGrid for deals.

The DealMap site is a destination but also a hub that sits in the center of a distribution network that includes a range of partners (which will undoubtedly grow quickly) and sites like Twitter and Facebook.

The DealMap aims to deliver deals content to users in whatever way or form they prefer to receive it: via search/browse functionality on the site itself, through Twitter or Facebook or via email. You can see deals on a map (hence the name) or in list form. Users can also browse by deal category (e.g., restaurants, shopping) or type (e.g., expires soon, 50% off, kid-friendly):

Beyond compiling all this content through crawling and business development, The DealMap is trying to capture “hard to find” deals — the kind that appear in a local store window but never get advertised anywhere else. They’re trying to get users and businesses to upload these directly (via mobile devices for example) and are employing “game dynamics” (like Foursquare) to create incentives to do so:

At certain point levels there will be tangible rewards for users, like a traditional loyalty program, redeemable for (what else) discount coupons and offers at restaurants and other local businesses.

Sites like Yipit are seeking to do a version of this by collecting the content of group buying sites and pushing aggregated offers via email. Search engine Ask has also tried to do something similar and comprehensive with its “Ask deals” site. However The DealMap combines both approaches and seeks to go further with the user-submitted deals information (a la the early days of RetailMeNot).

A subtle but important point is that users can search for local deals and find them. Typically there’s not enough content on any given site enable search and make it meaningful.

Users can click through to the originating site or source or see more information on a “deals profile” page on The DealMap:

The breadth of content and functionality on this site are impressive. Yet the API strategy may be what makes this site and turns The DealMap into the most valuable component of Center’d’s business.

CEO Jennifer Dulski said that there were probably 100 sites that The DealMap was drawing upon, roughly 80% of which were some flavor of group buying sites. However use of The DealMap’s API could grow the number of sites (online and in mobile) that offer local deals in dramatic fashion. We’ll see how many local publishers jump on board.

The business model here is an affiliate revenue share. And coupons/deals is arguably the one area — even more than search marketing — where advertising is truly content, to use the online cliche.

Dulski and her team have created something in this site and strategy that should be enormously successful for all involved.

Two years ago I asked “Where Is the Coupon Destination?“:

From my point of view the deals/coupons segment is ripe for a next phase of development. There are numerous online competitors but, mysteriously, no one has really gotten it right. Part of the reason for that is that it’s challenging to get sufficient inventory to satisfy a broad range of consumer needs/use cases in a “search” context.

There’s also the forgetting to bring the coupons (mobile can help) and the stigma (for some) associated with using coupons.

Offline coupon clipping behavior is an interesting mix of both “search” and “discovery.” People actively look through circulars and newspaper/direct mail coupons. However they don’t necessarily know what they’ll find or what may be on sale. So there’s a bit of serendipity along with the directional behavior. I’m looking for coupons for things that I normally buy or that I need, but occasionally a coupon will prompt me to try something new or different.

I’m not sure that a pure search model or an “Oodle for coupons” is right. There’s some creative mix of community, search, discovery and content aggregation needed to make a coupon or deals destination work online. And the branding or value proposition shouldn’t be around “coupons,” which is too pedestrian.

Instead, branding should probably be around deals and discounts (for breadth). It should also start off small, like an insiders network. This is the way that Craigslist essentially began in San Francisco and built slowly over time.

With The DealMap I feel like that site has finally arrived.

kgb Launches Multi-Country Deals Site

May 10, 2010

kgb, which offers the SMS-based mobile Q&A service, has just launched a group-buying site at kgbdeals.com. I’ve discovered that there may be as many as 90 to 100 sites that are doing some version of “groupoing” now — with more to come undoubtedly.

kgb competitor ChaCha also offers couponing but only in a single market for now. By contrast, kgb has leveraged its international reach and is doing this across several non-US markets:

Undoubtedly these deals will also be pushed into mobile and via the “traditional” kgb service.

Groupon Buys Mob.ly, Opens Valley Office

May 5, 2010

Groupon has acquired mobile development shop Mob.ly, which has a number of A-List clients, and simultaneously opened its Silicon Valley office:

Groupon has announced the opening of an office in Silicon Valley to gain better access to the Bay Area’s technology talent, with a focus on Groupon’s mobile- and business-intelligence practices. The core of Groupon’s mobile team comes through the acquisition of mob.ly, a mobile-development firm led by former Yahoo! Senior Director of Product Management Mihir Shah and Yishai Lerner, former Director of Engineering at Carrier IQ.

This obviously indicates a big mobile push to come from Groupon:

The company recently raised more than $100 million at a valuation of over $1 billion.

Foursquare Deals on SnackSquare

May 5, 2010

Will Scott (of Search Influence) just let me know about a new site, SnackSquare, that appears to aggregate and present the deals/specials available via Foursquare (using the API):

This is very interesting as a way to expose deals from Foursquare. Of course most of these are “mayor” or “best customer” loyalty deals that regular folks can’t take advantage of. If, however, there are more services like this that develop you might see a broadening of couponing on Foursquare (happening already to a degree) to appeal to new customers.

Regardless, it’s an interesting effort.

Coupons in UK Google Search Results

May 4, 2010

I was sent a couple of screenshots that indicate Google Places (former LBC) coupons are making their way into UK SERPs (click to enlarge):

I wasn’t able to duplicate this in US results simply by searching on categories and locations. If you include “coupon” in the query you do get lots of coupon results.

Has anyone else seen this?

Google blew it, in my view, some time ago by not more aggressively promoting local coupons or being a coupon aggregator. Given what’s happening with LBS providers such as Foursquare (basically a mobile loyalty platform) we’ll see if Google steps up with local coupons.

LivingSocial Gets More Money, Goes ‘Hyperlocal’

April 29, 2010

On March 11 group buying site LivingSocial announced a $25 million “B” round. Today, a little over a month later, the company is announcing a new $14 million “C” round.

In addition the company is launching in several new markets — Portland, Orange County, Charlotte and Philadelphia – bringing the total in which it operates its daily deal offering to 18.

In Seattle LivingSocial is introducing “hyperlocal,” which in this case is not the neighborhood but sub-DMA-level targeting within the larger metro market. Here’s what the press materials said about this new capability:

Now consumers in areas like Tacoma and Bellevue will start getting deals targeted to their location, in addition to Seattle proper. Hyperlocal deals not only help more consumers explore new things in their city, but these deals also provide merchants with a greater opportunity to reach local audiences on the LivingSocial Deals platform.

I spoke yesterday with LivingSocial CEO and Co-founder Tim O’Shaughnessy about the announcements and a range of issues related to the group buying phenomenon.

O’Shaughnessy told me that “hyperlocal” areas are self-selected by users and that the targeting may become more granular or narrow over time. Seattle is a test market of sorts but the company intends to roll it out more broadly.

I asked O’Shaughnessy about the “noise” in the market, though not yet mainstream, on both the consumer and SMB-advertiser sides. I also asked how LivingSocial was different or would differentiate from other competitors. He told me that the group buying market in his view was an easy market to enter but one in which it is very hard to scale.

He sees LivingSocial and Groupon perhaps as the only ones in the market now doing that. LivingSocial Competitor Groupon just raised a massive ($100+  million round) at a valuation of more than $1 billion. Groupon’s total funding is now reportedly over $170 million.

O’Shaughnessy said that in every market the company has “feet on the street” — at least a couple of reps that can negotiate deals and who know the market well. He felt that this is and would increasingly be a differentiator for the site, for “advertisers” and consumers.

I walked O’Shaughnessy through my “Dark Side” post and we discussed the various issues raised. In particular he said that LivingSocial does allow caps. He also said that businesses that use the service have high satisfaction levels. Indeed, there’s a growing body of anecdotal evidence that these programs work.

The race is on for these sites to get the deals, the scale and to some degree to develop themselves as “brands” that consumers recognize. Right now LivingSocial and Groupon are the two providers that are arguably best positioned from a consumer “brand perspective.” However, because businesses are buying new customers and there’s zero risk — this is not “advertising” in a conventional sense — it’s easier for a new company to sell group buying into the SMB market without a recognized brand.

As the phenomenon becomes more mainstream how will it evolve? And will it put pressure on other media because of this zero-risk proposition?

This second issue was a question that O’Shaughnessy and I discussed at some length. He believes that in many cases this is new local money coming into the market and not a substitution of group buying for other media. He also said that the WashingtonPost is a partner and saw that as a model for other LivingSocial-traditional media relationships potentially in the future.

O’Shaughnessy also told me that many of the local businesses that work with LivingSocial as clients/customers see it as a “branding play” in addition to being about new customer acquisition. That was interesting and something I hadn’t thought about before.

On the point about new customer acquisition, I raised the “one night stand” metaphor. He emphasized that LivingSocial wants its local business customers to be happy and to utilize their services again. He also  said that he sees opportunities for additional kinds of products in the future to more fully serve the local market.

Groupon Pours More Gas on the Fire

April 14, 2010

Group buying just got hotter. The whole segment went on everyone’s radar when Groupon announced in December that it had raised $30 million on top of a previous $36 million. That round reportedly valued the company at $250 million and helped spawn copycats galore (though Groupon is not the first group buying site by any means).

Last night TechCrunch reported that the site had raised a “huge” new round with a valuation of $1.2 billion. That will further ratchet up the frenzy that already exists around couponing/group buying.

Although these companies are positioned as something new, in the wake of the rise of the social Internet, (Groupon uses the term “social commerce”) it’s the old reverse auction (prevalent in the late 90s) with local couponing at the core (hence the name). And it’s fundamentally about online driving offline, though there’s an e-commerce component.

There are now literally dozens and dozens of companies in the US and Europe doing something very similar. This segment is hotter than a lobster in a dutch oven, you might say. Groupon is trying to get to scale faster than others and build its brand.

Previously aggregator Yipit, which positions itself as the “Kayak of group buying,” pointed out that there were more than 40 of these sites in the US as of a couple of months ago. It’s only going to get bigger as traditional publishers and others try and get into the game and these sites push their deals out through established channels.

Groupon right now is doing something of an “arbitrage” play: acquiring consumers through online display advertising and then selling them to local businesses for considerably more. I wrote a recent post, “The Dark Side of Grouponing,” based on an interview with a restaurant owner who said that the system “worked” but that there were lots of hidden issues and pitfalls.

That post received considerable discussion with one marketer pointing me to advertiser satisfaction stats on the Groupon site to refute the thrust of my post:

In response to the general trend but trying to provide more tools and/or flexibility to advertisers and publishers are Analog Analytics, which offers couponing/deal tools to traditional publishers, and Closely, which offers an array of promotional/CRM tools to SMBs and publishers.

I also had a very interesting conversation with David Ambrose, the co-founder of NY-based Scoop Street, not long ago. Among other things he and I discussed how these sites were competing with all the other channels and media trying to get SMB/local business attention and mindshare and how the model might influence the “culture” of local advertising.

There’s no question that Groupon and its kin “work” and are well-liked by consumers. Here are the questions that surround these sites in my mind:

  • Is there staying power in the market?
  • Will SMBs “burn out” on these sites, especially as they compete with one another to offer more aggressive consumer deals and bombard SMBs with calls? (This is where brand comes in.)
  • Will their value proposition (pay only for real customers, get money up front) have a broader impact on what SMBs expect from “advertising” and are willing to pay for?
  • How will grouponing and the business model question immediately above affect traditional publishers/media channels (even search and other online channels)?

Three years ago at SMX Local-Mobile I ran a panel called “The Ultimate Local Ad Model” which asked the question: will the local market migrate to lead-gen and other CPA models from PPC and CPM? The panelists argued “no” and that multiple models would co-exist. I agree with the latter statement but there’s something significant going on here that is roughly comparable, in a way, to the whole phenomenon of “geo-social gaming” and how it may be changing the culture of the local-mobile segment.

Where 2 Discussions Yesterday

April 1, 2010

I had a range of fascinating discussions yesterday with people at the Where show:

  • Tellmewhere (the France-based social directory, chiefly on the iPhone)
  • MapQuest about a bunch of new stuff coming
  • Placecast about geofencing (65% of people receiving ShopAlerts in their trial went into the store and bought something. Ka-ching!) and cleaning up location data
  • Locomatix, a new “real-time” location platform (right now ahead of the general level of sophistication in the market)
  • Everyscape: many partner announcements coming
  • Ted Morgan about Skyhook Wireless’ new “local favs” SDK for developers to add location pages to any app
  • Tyler Bell (formerly of Yahoo) now at AlikeList
  • Perry Evans of Closely

The local market is changing and the confluence of new marketing platforms, social communication and mobile devices is going to radically alter it for both businesses and consumers. The past several years of “local search” will probably, in retrospect, resemble a quaint “Jurassic” period five to seven years from now.

Now Local Deals from Center’d: ‘The Dealmap’

March 22, 2010

Could the local deals segment get any hotter than it is? The answer is still “yes” in all likelihood. Indeed, the “local offers” or “deals” arena is red hot right now — smokin’ to use the colloquial expression.

Earlier today I wrote about the launch of live offers platform Closely and this afternoon I discovered that local semantic search site Center’d is about to launch a consumer facing deals site and distribution vehicle called The Dealmap.

It appears to be a slightly different spin on the group-buying phenomenon, with deals coming from multiple sources (“the largest number of sources”), email delivery and Twitter distribution by city.

Similar to deals aggregator Yipit you’re able to select categories of offers, which appear in some cases to correspond to the types of local search categories (e.g., romantic, kid friendly, group friendly) that Center’d has set up on the parent site.

Another interesting element here: “Become a Deal Hero.” The copy on The Dealmap suggests a “mavens” or an influencers club or something along those lines (click to enlarge):

From what I can tell it appears to be a fairly polished presentation and reaches the UK (or London at least). There’s no mention of mobile on the site, but Center’d has an iPhone app and I would guess that’s lurking somewhere in the background here as well.

While there appears to be some version of offer aggregation going on, there’s also a direct deal submission form for SMBs (maybe users too):

The alchemical brew of deal sites, geo-location games, social media and mobile is now starting to really accelerate change in what had been a relatively stable and static local search market for several years.

Even though these deal sites are springing up like fungus in a damp forest there’s still an opportunity for Center’d/The DealMap (and others) given that the public remains largely ignorant of these sites. (Facebook is a sleeping giant here too.) There’s a land grab going on among coupon/offer/deal sites and a small number of leaders and brands will likely emerge in the not-too-distant future.

What’s interesting is that Center’d had been a thoughtful but still second-tier local search site (in terms of usage) so far. This new site is somewhat unexpected, really interesting and offers a potentially bigger opportunity for the company than the mothership itself.

Startup Closely Brings ‘Live Offers’ to SMBs

March 22, 2010

Perry Evans, one of the founders of MapQuest and the former CEO of Local Matters, is launching his new venture at the DEMO conference today. The company is called Close.ly and it offers a spin on group buying, coupons and social marketing for small businesses (SMBs). It’s very very interesting.

It’s positioned as a “social action platform” for SMBs and the publishers and channels that work with them. This is how the release out this morning describes the effort:

Closely Business Edition is a real-time application service that allows small businesses to centrally launch, manage and measure promotions through social media channels such as Facebook and Twitter, enabling them to build their customer base and manage demand with real-time, socially engaged offers.

Closely Business Edition puts the professional social marketing tools found in branded group buying services into everyday business use for live local promotions. Connecting a live offer page to each social media post, Closely enables a business to engage their followers and fans with individual and group offers. A Live Marketing Dashboard delivers advanced productivity and performance to the business with flexible offer publishing, scheduling and analytics.

I got a quick demo of the product from Perry Evans a few weeks ago. I was impressed by the careful thinking behind Closely and think that Evans is entering the market at the right time with a “right product.” It’s an evolution of pure couponing but also of group buying.

He distinguished Closely from the Groupons of the world, which it resembles at first Glance. He pointed out that many SMBs are ambivalent about the group buying sites, which work well but exact a hefty margin and so can’t really be used by SMBs on an ongoing basis. As I pointed out earlier in my discussion of Analog Analytics, they’re mostly a “one night stand” for SMBs seeking new customers or a quick infusion of business.

Closely sees itself as something much broader — a social action platform — that can be used for prospects and existing customers on an occasional or regular basis. It also provides a dashboard, analytics and a way to regularly engage users of social media. In other words, it offers a way to create and schedule promotions and distribute them with existing social media channels, without having to rely on group-buying email networks.

Here are screenshots of the offer landing pages (a profile page substitute) and the SMB dashboard:

Closely empitomizes a new phase in SMB marketing, which combines familiar elements (offers/coupons) with less familiar tools and services (social media) that are quickly being adopted by SMBs. It’s also part of a trend bringing increasingly sophisticated online marketing capabilities to SMBs at very low cost.

Group Buying Hot, LivingSocial Gets $25M More

March 11, 2010

Late last year Groupon stunned and excited many by announcing $30 million in funding. Today “social commerce” site LivingSocial announced a series B round of $25 million:

LivingSocial, the social commerce leader behind LivingSocial Deals and top Facebook applications Visual Bookshelf and Pick Your Five, today announced that it has completed a $25 million Series B round of venture funding led by U.S. Venture Partners, with Grotech Ventures and Steve Case’s Revolution, LLC participating. With this round of funding, LivingSocial Deals is launching in four additional cities: Chicago, Denver, Raleigh Durham and San Diego, making the program live in 13 markets across the country, growing to dozens of cities by year-end. By signing up for LivingSocial’s free daily online service people are saving an average of 50-70% at their favorite places . . .

The company, which was a social networking effort of sorts, has now reinvented itself effectively with its group-buying effort: LivingSocial Deals.

However these group buying sites are now springing up every other day. All you need is a wordpress blog (essentally) and a telepone to start dialing for dollars. Often the discounts, as the PR copy above indicates, are very steep. What that means in the most extreme cases is that the SMB may break even or even take a loss in exchange for new customers and the hope of lifetime value, depending. In many cases the merchant does make a profit and is able to book revenue ahead of fulfillment.

These channels work very effectively and consumers love them for obvious reasons. But merchants are often ambivalent because of the “costs.”

Enter another site that I just became aware of called SyncFu. According to the email I received, it works in 50+ countries and seeks to empower the merchant directly as a platform:

SyncFu assists sellers, allowing them to offer their selected products on group selling at their web site through an embeddable widget. There are no intermediaries, and no percentage fees charged. The system utilizes micropayments to make reliable pledges / reservations for later purchase after the deadline for signing up expires.

There are no target quantities / total values, as the price of units drops proportionally with each reservation, and all accordingly to the quantity/price relations the seller specified at syncfu.com. Cost of making reservations depends on the country/operator as it is made via mobile phone, and is in the range of $1 – $3. After the operator fees, this charged fee is kept by SyncFu for its services, which is insignificant to the total value, does not represent cost for the seller, and for the buyer it is a ‘dissolving’ cost.

After the deadline expires, each reservation holds own discount code, and the seller has the flexibility to choose how to request the full payment of lowest achieved amount. It can be through own web shopping cart, through physical visit, or via email tool . . . 

The only problem is that these group buying sites are marketing vehicles because they aggregate audiences in ways that local merchants would have difficulty doing — unless they’re very savvy and persistent.

Analog Analytics Helps Pubs Challenge Groupon

March 9, 2010

I had a very interesting discussion yesterday with Ken Kalb of Analog Analytics, a company which can either be described as a deals/coupon and mobile (SMS) marketing platform or an analytics provider for traditional media. But of course it’s both.

Here are the relevant paragraphs from the release:

Analog Analytics today officially launches its software platform to deliver highly monetizing interactive coupons, gift certificates and “Bigger Better Deals” for local publishers and advertisers in any media. Now, publishers of all types, including online, mobile, newspaper, TV, radio, motion picture and billboards, will benefit from the much higher click-through rates (CTR) of two- to ten-percent for these highly interactive offerings. This CTR amounts to 10 to 100 times greater than the national average for display ads. 

The Analog Analytics platform provides publishers which have struggled to make money with their online content with a mechanism to increase their ad revenue regardless of the media. It enables advertisers or publishers to create online, mobile or a text-message call-to-action print coupons or gift certificates, integrating and optimizing the performance of both traditional advertising and online interactive. With this solution publishers leverage advertising in multiple media concurrently from the software-as-a-service platform and immediately increase their ad revenue. 

Analog Analytics has already signed up a number of substantial customers including Village Voice Media, Local.com, Wick, Media News Group, the nation’s leading weeklies as well as 850 publishers and 2500 advertisers nationally.

I could now write 5K words. But I don’t have time. So I’ll try and hit a few high points. 

Analog Analytics is a platform licensed to mostly traditional media companies (as indicated in the list above). It enables publishers to offer a more “robust” coupon and deals solution in general and to better compete with the emerging “threat” from what I’ll call the “Groupon Segment.” 

The following is an example of a group-buying deal offering (“bigger, better deal“) from the company. In a sort of tongue-in-cheek way Kalb referred to this as “the Groupon killer.” It’s not but it gives traditional publishers a weapon against these fast-growing group-buying sites. 

Otherwise the company enables the local sales channel to sell/offer more traditional coupons and gift certificates:

The publisher can price and package any of this how it desires. Whereas Groupon, et al. offer an effective but limited new customer acquisition tool — I characterized it to Kalb as a “one-night stand” — the array of options here provide both new customer acquisition and CRM/loyalty capabilities. And, as I said, the flip side is traditional media analytics.

People redeem the coupon or opt-in to the SMS list and the publisher (and advertiser) sees how effective the traditional medium is — or isn’t as the case may be. But as the Analog Analytics release points out response rates with offers/deals are at least 10X vs. traditional display advertising online. 

Coupons/offers/deals isn’t merely a cute, consumer-friendly trend, it’s a digital and direct marketing phenomenon that’s here to stay. The Groupon proposition to the SMB is “no risk”: “you only pay if people buy.” It doesn’t get any more CPA than that.

Kalb also emphasized with me that these sites enable local businesses to book revenue in advance. The new products in the coupon and group-buying segments are “tangible” and easily understood by SMBs compared with clicks, “Which is an abstraction to small business,” explained Kalb. 

The market is changing quickly now for SMB marketing. Phenomena like social media and couponing are becoming more visible and effective tools and they often “cut out the middle man,” as people used to say. In this case the “middle man” is the traditional sales channel/publisher. 

If you take a deeper look it starts to become clear that “Grouponing” is just the clever packing of a more concrete form of direct digital marketing.

8Coupons Makes Bid to Become Aggregator

March 5, 2010

There are essentially two angles in coupons: aggregator or sales channel. Either you’re bringing lots of deals and offers to consumers or you’re a direct sales channel acquiring offers from merchants. It’s going to be very rare for any single company to occupy both positions. 

I previously wrote about Yipit, which is aggregating deals from the various group buying vendors (e.g., Groupon). Now 8Coupons, which began in New York selling mobile coupons to SMBs is making a play to become an aggregator itself but with a bit of an angle . . . 

Here’s the PR pitch for the site now: 

With so many coupon, deal and discount web sites out there, consumers are on the verge of “Coupon Fatigue.”  There are so many sources for discounts and money saving information that it is hard to digest and utilize them all. 

That’s where http://www.8coupons.com/ comes into play with a One-Stop Shop for all the best deals near you.  8coupons aggregates coupons, sales, deal tips, and other discount related information from a variety of sources that include Valpak,MoneyMailer, Local Bloggers, “Groupon-like” Deal of the Day websites, Merchants themselves, Users themselves, etc., and displays them on 8coupons.com‘s sexy location-based (neighborhood level) map.  

8coupons’ geo-locator and mapping technology finds where you are and automatically populates 8coupons’ “Money Map” with the best, most popular, deals near you.  The8coupons deals algorithm figures out the “Top 8″ deals near you based on various metrics such as clicks, impressions, prints, texts, etc.

There might be a rare case where a non-aggregator can develop “brand” status. Groupon, because it’s the most well known of the lot, has a shot at this. 

But who do you think will win or what cluster of sites do you think will win in the now very crowded segment of largely anonymous companies offering deals to consumers and soliciting local business offers?

Compete: 94% Do Online Research Pre-Purchase

March 1, 2010

A week or so ago Compete released some data showing how consumers use multiple sources of information prior to making a purchase and how those sources may differ by category. One interesting stat from the survey data that jumped out at me was the following:

[O]nly 6% of consumers surveyed as part of the Online Shopper Intelligence study indicated that they conducted no research prior to their last online purchase.

In other words, 94% did online research before making an online purchase.

While the context here is online purchase behavior, we can reasonably assume that this behavior is equally applicable to the far more common practice of buying offline. Most purchase behavior occurs offline (e-commerce is less than 4% of US retail) and these online buyers are not going to behave differently when they buy in physical stores.

Prior studies by comScore, BIGResearch, Yahoo! and others have found 80% to more than 90% of consumers buying in-store have consulted the Internet for information prior to purchase: ROBO.

Here’s another interesting piece of data from the Compete survey, showing the continuing popularity of coupon sites.

Source: Compete, Inc. 2/10.

Yipit, Group Buying and SMBs

February 24, 2010

I recently wrote a short post about Groupon and the growing phenomenon of group buying online. Among the several companies I mentioned in the post was Yipit. I lumped the company in with several others as purveyors of local deals to consumers. Shortly thereafter I was contacted by the co-founders of Yipit (who wanted to clarify the nature of their service) and I had a fascinating conversation with them about the entire segment.

Rather than a direct competitor to these group buying sites the company aims to position itself as the “kayak of group buying.”

What that effectively means is that Yipit aggregates deals from many providers (there are a growing number; see list at bottom). The consumer-user selects the desired offer and clicks through to transact on the underlying third party site, in the same way that Kayak refers leads to airlines or hotels. Similarly Yipit takes a referral or affiliate fee for the lead — provided there’s a transaction that occurs.

The way that Yipit improves upon any one of these sites (e.g., Groupon) is that it brings together much more inventory (offers) than any one of these sites individually. Because of this, it allows users to select areas of interest and not receive offers that aren’t relevant. That has always been my experience with Groupon itself; the concept is great but there are lots of deals I’m not interested in:

The concept of group buying has been around since Mercata and the late 1990s. However in “act 1″ of the Internet it never took off. Now it has momentum on the heels of the general growth of online coupons and social networks more broadly. Consumers love deals and these sites only charge businesses — mostly SMBs — if enough people show up and a sale is made, collectively speaking:

The offers are always time-sensitive and require a commitment/purchase up front by the user. And the structure of the offer creates competition to ensure that the minimum required volume is met.

Each of the sites that Yipit “indexes” are effectively telephone sales channels, which negotiate these deals with local merchants. Yipit then delivers, or helps deliver, traffic to those individual sites.

I was told by Yipit that where there were once just two or three of group buying sites, now there are dozens of them. The barriers to entry are very low: a wordpress blog, a telephone sales and some email software.

Another fascinating thing to consider is that the risk to the merchant is almost zero; SMBs only pay when the group deal is secured. Thus it becomes potentially easier to sell something like this (especially by a “no name” company that the SMB hasn’t heard of) than more conventional “advertising.”

There’s no “ad budget” that gets tapped; the commission is a slice of sales. Consequently there may be more money for these types of programs than for “advertising.” The notion that “SEM funds itself” is one of the myths of paid search, which is especially a myth in the case of small business. However that is in fact true in this case.

If these group buying sites develop enough momentum there’s a kind of parallel universe of SMB promotions that might arise, where the value proposition is more direct and transparent to the merchant and the risk much less than buying clicks or even calls in some sense. While this is clearly not a model and channel that’s going to work for plumbers or lawyers, it probably works for a much broader group of local businesses than one might think.

Here are the sites (or most of the sites) that Yipit draws upon to serve up geographically relevant deals and offers:

Do you think “grouponing” is a fad or a phenomenon that is here to stay in some sense?


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